REGULATION

Calif. engaging in carbon-trading discussions with other Western states

SACRAMENTO, Calif. -- California's top climate policymaker said yesterday that she is urging other Western states to use carbon trading to comply with President Obama's Clean Power Plan.

California Air Resources Board Chairwoman Mary Nichols is participating in discussions led by former Colorado Gov. Bill Ritter (D) through his clean energy center at Colorado State University. The talks also include all other Western states, she said, and are centered around ways to deal with the landmark greenhouse gas standards for power plants that U.S. EPA released earlier this month in final form.

"We're collaborating with other states," she said yesterday. "We have not put forth a manifesto on what a regional power market would look like, but we've been very actively participating in discussions that are actually being led by Governor Ritter and his team at Colorado State, working quietly at the staff level and trying to build support for some ideas that will really work."

Nichols was speaking at an event put on by Advanced Energy Economy (AEE), the trade group founded by California activist billionaire Tom Steyer. AEE is also a partner in Ritter's Center for the New Energy Economy.

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California has had a carbon cap-and-trade system since 2012 as part of its 2006 law requiring a return to 1990 emissions levels by 2020. State lawmakers are currently working on a bill that would extend the goal to 40 percent below that by 2030.

Pushback from some governors

Nichols acknowledged opposition to carbon trading from some governors but said that lower-level officials might be more amenable.

"We're up against some entrenched political opposition," she said. "We have governors out there who have taken the position that 'No way, nohow, is there ever going to be any carbon trading' in their part of the world."

"We're not about to try to say, 'You're wrong; we're going to force you to do it our way,' but we are working with their public utilities commissioners, their environmental commissioners, of course, and their utilities to try to build support for a more rational, cost-effective and I think also progressive way of dealing with the plan. The power plan is right now the biggest game going on nationally, and we're very excited about the opportunity."

A U.S. EPA official also confirmed that California is taking a leadership role among Western states.

"Yesterday, we were on a call with our other states -- Hawaii, Nevada, Arizona, California -- and having California at the table explaining that they want to come out with a plan, they want to do it by the deadline, they care about how it works, how the trading systems with other states can happen," said EPA Region 9 Administrator Jared Blumenfeld.

"In the West, California is this big sucking sound," he said. "People build facilities to power California, and so how California's looking at this is going to shape, especially in the West, have a very kind of outsized impact on how the Clean Power Plan is implemented."

Adding state and local voices to the debate

Blumenfeld also urged people attending the conference to speak up about the benefits of taking action on greenhouse gases, saying it would help build support for EPA's plan and international action on climate, in turn.

"We are a very, very long way from Washington, D.C., and your voice and the benefits that you're bringing to your communities are often not heard, whereas the communities that are suffering -- in many cases, those are very authentic, legitimate voices -- those are very loud," he explained.

"And so balancing the discussion so that people really understand the opportunities, the economic opportunities, I think is absolutely critical to the effectiveness of the Clean Power Plan. And if the Clean Power Plan is effective, I think it gives the president and the country an opportunity to go to Paris this December and really show that the world's largest economy can take meaningful and serious cuts in reducing carbon, and hopefully that will stimulate others to do the same," he added, referring to upcoming international climate negotiations.

Nichols said that pricing carbon would help corral international cooperation on climate by forcing companies to account for it in their bottom lines.

"I have become a believer that, however we manage to do it, the price on carbon is the key global policy that has to happen," she said. "Without that, it's just too difficult for most industries to see their way toward transformation. I know there are people inside big oil companies, because I've talked to some of them, who understand the nature of the change that has to happen. And it's not necessarily that they're even resistant to it, except in the sense that their job is to protect their investments and protect their shareholders, and they're going to keep doing what they're doing until somebody makes them do something different."

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